Akron, NY | Off-Market Acquisition | Nov 2017
Akron MHP is an all-ages, affordable community consisting of 122 spaces. The community was acquired through an off-market, pocket listing with a local broker who had a personal relationship with the former owner.
About the Project
Akron MHP is a beautiful, 4-star community consisting entirely of tenant-owned-homes. Many units are newer multi-section homes with breezeways and attached garages. The impressive aesthetics far exceed the stereotypical trailer park stigma which permeates our society.
Save for some water leaks and potholes, Akron MHP was in nice aesthetic condition at closing. That said, Akron’s P&L was wrought with extensive mom-and-pop expenses which lowered the asset’s valuation. Further, the community was purchased from a tired, legacy owner who had not kept lot rents in line with the market rate. Acquired with significantly below market rents, Akron would take some time to fully recapture the loss-to-lease.
What We Did
Sunrise negotiated a $3.77mm purchase price and began working to improve the community. Capital was infused to fix water leaks and make necessary road repairs. Contracts with landscaping and snow plowing vendors were renegotiated to lower recurring expenses. Sunrise also enlisted Colliers International to perform a market rent analysis, which concluded that Akron’s average lot rent of $270 was significantly below the market rate of $500.
Prior to sweeping rent control being enacted in NY, Sunrise recaptured a portion of the loss-to-lease. Over three years, lot rents moved to $370. With physical occupancy abutting 100% and strict rent control in place, Sunrise maximized the value of the asset and decided to sell the property. All told, Sunrise created over $1mm of sweat equity in three years.